Crop Revenue Coverage CRC Crop Revenue Coverage CRC

Crop Revenue Coverage (CRC)

Crop Revenue Coverage (CRC) Ø CRC is an insurance program that guarantees a stated amount of revenue. CRC (like Income Protection) provides comprehensive protection through a dollar guarantee based on commodity futures prices. Ø CRC protects a producer from loss of revenue resulting from low prices, low yields, or a combination of the two.

CRC Attributes Ø Same acreage and production reporting dates, optional units and quality adjustments as APH Ø Establish a Minimum Guarantee per acre ü Approved yield ü Base price ü And selected coverage Ø Coverage levels ranging between 50 and 75%, in 5% increments Ø Establish a Harvest Guarantee per acre ü Approved yield ü Harvest Price ü Selected Coverage

Final Guarantee Ø Derive Calculated Revenue ü =harvest price x yield to count Ø The Final Guarantee equals: ü The greater of the minimum or harvest guarantee Ø How much is my indemnity? ü Calculated revenue is compared with the final guarantee. ü If calculated revenue is less than the final guarantee, the producer is paid the difference.

The Base Price is an average of the daily settlement prices, for a month before normal planting time, of a harvest time futures contract. The Harvest Price is an average of the daily settlement prices, for a month near the end of normal harvest, of the harvest time futures contract.

CRC Price Determination Specifics Crop/Sales Closing Date Commodity Exchange Futures Contract Max % Base Price Month Harvest Price Month Corn before 3/15 CBOT Sept. 100 Dec. Aug. Corn on 3/15 CBOT Dec. 100 Feb. Nov. Soybeans before 3/15 CBOT Sept. 100 Dec. Aug. Soybeans on 3/15 CBOT Nov. 100 Feb. Oct. KCBOT July 95 Aug. June Cotton on 1/15 NYCE Oct. 100 Dec. Sept. Cotton on 2/28 and 3/15 NYCE Dec. 100 Jan 15 to Feb 14 Nov. Grain Sorghum before 3/15 CBOT Sept. 95 Dec. Aug. Grain Sorghum on 3/15 CBOT Dec. 95 Feb. Nov. Rice on 1/15 CBOT Sept. 100 Dec. Aug. Rice on 2/15 CBOT Nov. 100 Jan. Oct. Winter Wheat on 9/30

Example 1 Harvest price ends up higher than the Base Price – With a 34% Production Loss Approved APH yield Coverage Level Base Price Harvest Price Production to Count Crop Value Revenue Guarantee $136. 50 = 70 bushels per acre = 65% Share = 100% = $2. 20 per bushel = $3. 00 per bushel = 46 bushels per acre = Production to Count x Harvest Price = $138. 00 = Approved APH yield x Coverage Level x the higher of Base Price or Harvest Price x Share = $136. 50 - Crop Value = CRC Indemnity $138. 00 = $0. 00

Example 2 Harvest price ends up higher than the Base Price – With a 57% Production Loss Approved APH yield Coverage Level Base Price Harvest Price Production to Count Crop Value Revenue Guarantee $136. 50 = 70 bushels per acre = 65% Share = 100% = $2. 20 per bushel = $3. 00 per bushel = 30 bushels per acre = Production to Count x Harvest Price = $90. 00 = Approved APH yield x Coverage Level x the higher of Base Price or Harvest Price x Share = $136. 50 - Crop Value = CRC Indemnity $90. 00 = $46. 50

Example 3 Harvest price ends up less than the Base Price – With a 34% Production Loss Approved APH yield Coverage Level Base Price Harvest Price Production to Count Crop Value Revenue Guarantee $100. 10 = 70 bushels per acre = 65% Share = 100% = $2. 20 per bushel = $1. 35 per bushel = 46 bushels per acre = Production to Count x Harvest Price = $62. 10 = Approved APH yield x Coverage Level x the higher of Base Price or Harvest Price x Share = $100. 10 - Crop Value = CRC Indemnity $62. 10 = $38. 00

Example 4 Harvest price ends up less than the Base Price – With a 57% Production Loss Approved APH yield Coverage Level Base Price Harvest Price Production to Count Crop Value Revenue Guarantee $100. 10 = 70 bushels per acre = 65% Share = 100% = $2. 20 per bushel = $1. 35 per bushel = 30 bushels per acre = Production to Count x Harvest Price = $40. 50 = Approved APH yield x Coverage Level x the higher of Base Price or Harvest Price x Share = $100. 10 - Crop Value = CRC Indemnity $40. 50 = $59. 60